A growing number of Canadians — roughly five million — flock south of the border every year to take advantage of cheap flights, a new Conference Board of Canada report says.
Extra fees and taxes are largely to blame for higher fares in Canada, which result in a cost advantage of up to 30% for American airports, researcher Vijay Gill said in a statement.
The report says Canadian carriers would be wise to reduce their fares to get travellers to fly locally.
"Government and industry don't need to take an 'all or nothing' approach to this issue, but reducing taxes and fees or even changing how they are assessed and collected could make a difference," Gill said.
Travellers who continue to fly out of the U.S. instead of Canada can make matters worse.
"When a Canadian hub airport loses passengers, it can lead to reduced flight frequencies, higher travel costs and poorer service for all Canadians," David Stewart-Patterson, the board's vice-president of public policy, said.